As digital overlays begin to dictate the competitiveness and attractiveness of cities in rankings the world over, India's new Narendra Modi government has embarked on an audacious plan to build a 100 smart cities, urban fiber optic-connected digital clusters that will provide next-generation services to its residents.

Modi's two-month old government presented a budget that initiates steps towards a "digital India," with allocations for components such as smart cities, virtual classrooms, and technology startups. A budget of $1.2 billion has been set aside for smart cities alone, resources that should serve to get initial pilots going in India's numerous poorly-managed cities.

As the China-style infrastructure explosion gets off the ground, global technology firms including Cisco and IBM are racing to submit proposals to local governments, bid for projects, and collaborate with real estate developers to build greenfield digital cities.

The urban development ministry's Department of Industrial Policy & Promotion has already undertaken an Expression of Interest process to shortlist several technology consultants. Early indications are that the government will back at least seven large city high-tech upgrades and many more satellite smart cities abutting metropolises. More clarity will emerge in the coming months on the projects and budgets.

IBM's Rahul Sharma

Image courtesy of IBM

"Technology multinationals have realized how big this is and they are willing to make big investments," said Rahul Sharma, Executive director, global business services, IBM India & South Asia. The excitement is about the fact that India is not shackled by existing technologies, and the opportunity is to create smart cities from the ground up, he said.

Smart city projects are underway in many parts of the world, but in populous India where very little work has been done in the domain, the opportunities appear boundless.

India will urbanize so rapidly that by 2030, over half of the population will dwell in its cities. By 2025, India will have 30 cities with 10 million or more residents, with Delhi set to become the most populous city in the world. Now is the time to build smart cities, said Angshik Chaudhuri, chief of staff, smart +connect communities and executive director for globalization for Cisco in India.

Cisco's global business unit for smart cities is headquartered in Bangalore from where it designs and exports smart city solutions to cities such as Barcelona in Spain and Songdo in South Korea.

Cisco's Angshik Chaudhuri

Image courtesy of Cisco

India's IT companies have built fixes for the biggest technological challenges globe-wide for governments and multinationals; however, very little technology has been put to use to solve urban challenges like traffic, security, or water supply within chaotic cities the country.

For instance, Bangalore's Electronics City suburb has the country's largest aggregation of technology and IT services companies, and yet, the companies' digital footprints stop at their gates. Now an agreement between Cisco and the Electronics City Industries' Association (ELCIA) is making free Wi-Fi connectivity ubiquitous in all its spaces. Real-time data from cameras and sensors will be aggregated at a command center that will come up next year. The data will be offered to companies to build smart solutions such as an emergency response system, smart street lighting, video surveillance of public spaces, and real-time location analytics.

The learning from this "Living Lab" will be leveraged by ELCIA and Cisco to build five of the 21 smart cities proposed along the DMIC, the gigantic $100-billion Delhi-Mumbai Industrial Corridor part of which is funded by Japan, that connects India's political capital to its financial capital. As the project's principal Information and Communications Technology (ICT) advisor, Cisco will help lay the 1,500-kilometer digital footprint for the project scheduled to complete in a decade.

Much of the investments into new, smaller greenfield cities such as those coming up in the suburbs of Mumbai are from private and overseas investors. "There is much more uptick in this space in the last few years, private developers are taking the lead," said Sharma of IBM, which has been working with the real estate developer Lodha Group to build Palava, an integrated smart city outside Mumbai.

Cisco, meanwhile, has been working on developer Lavasa Corp's Lavasa, also near Mumbai. "Smart city projects will get bigger in the coming years," said Chaudhuri of Cisco.